US embassy cable - 05DAMASCUS5778

C O N F I D E N T I A L SECTION 01 OF 02 DAMASCUS 005778 
 
SIPDIS 
 
NEA/ELA 
NSC FOR ABRAMS/DORAN/POUNDS 
TREASURY FOR GLASER/LEBENSON 
EB/ESC/TFS FOR SALOOM 
 
E.O. 12958: DECL: 10/31/2015 
TAGS: ECON, ETRD, PREL, SY 
SUBJECT: SARG KEEPS QUIET ECONOMIC PRESSURE ON LEBANON 
 
REF: A. DAMASCUS 4675 
     B. DAMASCUS 4603 
 
Classified By: CDA: Stephen Seche for Reasons 1.5 b/d 
 
 1.  (C) Summary.  Economic relations between Syria and 
Lebanon remain problematic.  In addition to security 
concerns, the SARG,s disincentives for travel to Lebanon 
remain effective in dissuading the average Syrian from 
visiting or shopping across the border.  Lebanese workers in 
Damascus report feeling their own position is increasingly 
precarious.  Our contacts point to the quiet halting of 
electricity transmissions to Lebanon as proof that the Syrian 
regime continues to relish the opportunity to economically 
punish its neighbor.  In August and September, many advised 
the SARG to abandon its policy of economically coercing the 
GOL, but in the post-Mehlis environment those same critics 
are largely silent.  End summary. 
 
2.  (SBU) After restarting suspended electricity 
transmissions to Lebanon on September 6 (ref A), the SARG 
quietly cutoff electricity to Lebanon again on October 19. 
Dr. Muataz Sha,rani, director of the studies department at 
the Syrian electricity parastatal, PEE, told us that 
electricity was cut off to Lebanon in accordance with the 
agreement that was negotiated between the SARG and the GOL in 
August-September of this year.  Sha,rani said the agreement 
stipulated that electricity transmissions would halt anytime 
the GOL was more than ten days late with a payment. 
 
3.  (C) The suspension of electricity comes at a time when 
the local Lebanese business community is feeling nervous. 
One Lebanese manager related to us a story making the rounds 
in the community about a Lebanese-plated car that took a 
wrong turn during last week,s demonstrations and ended up on 
the edge of the crowd.  According to the Lebanese 
businessman, the crowd hit and rocked the car before the 
driver was ultimately able to break free.  Though no one was 
hurt, our Lebanese contact told us that the story is only one 
of a number of recent developments that make the Lebanese 
working in Damascus feel increasingly vulnerable. 
 
4.  (C) Other Lebanese professionals have told us about the 
ongoing difficulties they face with acquiring Syrian work 
permits and residency cards for themselves and their staff. 
Previously, the SARG issued work and residency cards with a 
one-year or more validity, though many Lebanese didn,t 
bother applying as the requirement was not enforced.  After 
the Syrian army,s withdrawal from Lebanon, work and 
residency permits became mandatory for all Lebanese in Syria 
with the SARG deporting some white collar workers without 
papers in July.  At the same time, the validity of the permit 
was reduced to three months.  In addition to the delays and 
difficulty in acquiring the permits, Lebanese professionals 
tell us Syrian officials at the border do not now hesitate to 
turn away any Lebanese whose paperwork is in any way 
deficient.  A consultancy firm manager told us that as a 
result of the increasingly strict SARG enforcement, he went 
out of his way to advise his Lebanese staff to bring all of 
their documents with them during the upcoming Eid holiday as 
he expected problems when they attempted to return to Syria. 
 
5.  (C) Since the publishing of the Mehlis report, the mood 
towards Lebanon has shifted in Damascus.  When the SARG began 
its policy of economic coercion against Lebanon last summer, 
some business leaders and others spoke out against the tactic 
and lobbied the regime to heal the rift (ref B).  Today, 
those same critics just shrug off the suggestion the SARG is 
returning to a policy that has already proven to be a 
failure.  One Baathist reformer pointed out to us that it is 
in his Party,s nature to return to a policy of coercion when 
it felt challenged.  A seemingly increasing number of Syrians 
insist to us that their country has very little to lose 
economically from continuing difficult relations with 
Lebanon.  Official Syrians also continue to publicly downplay 
the costs.  At approximately the same time the electricity 
was cut off to Lebanon, D/PM Dardari commented to the press 
that Syrian workers returning from Lebanon will easily be 
reintegrated into the economy thanks to new real estate 
development investment expected from the Gulf. 
 
6.  (C) Comment.  Though it is not yet clear the SARG has 
returned to a policy of economic confrontation with Lebanon, 
the mood in the capital is at best indifferent to the 
possibility.  As the electricity cutoff and work permit 
difficulties highlight, it is clear that the SARG won,t 
hesitate to economically bully its neighbor if given a 
chance.  Potentially more serious, the lack of internal 
criticism on this issue is symptomatic of the nationalist 
backlash to the Mehlis report increasingly apparent in 
Damascus.  It has left usually bold critics of the regime 
leery of voicing even the most oblique dissent. 
SECHE